Research Methodology

Bank Rate (Current Rate: 6.0%)

Bank Rate is the rate at which central bank of the country (in India it is RBI) allows finance to commercial banks. Bank Rate is a tool, which central bank uses for short-term purposes. Any upward revision in Bank Rate by central bank is an indication that banks should also increase deposit rates as well as Base Rate / Benchmark Prime Lending Rate. Thus any revision in the Bank rate indicates that it is likely that interest rates on your deposits are likely to either go up or go down, and it can also indicate an increase or decrease in your EMI. This is the rate at which central bank (RBI) lends money to other banks or financial institutions. If the bank rate goes up, long-term interest rates also tend to move up, and viceversa. Thus, it can said that in case bank rate is hiked, in all likelihood banks will hikes their own lending rates to ensure that they continue to make profit.

Cash Reserve Ratio CRR (Current Rate: 6.0%)

CRR means Cash Reserve Ratio. Banks in India are required to hold a certain proportion of their deposits in the form of cash. However, actually Banks dont hold these as cash with themselves, but deposit such case with Reserve Bank of India (RBI) / currency chests, which is considered as equivalent to holding cash with RBI. This minimum ratio (that is the part of the total deposits to be held as cash) is stipulated by the RBI and is known as the CRR or Cash Reserve Ratio. Thus, when a banks deposits increase by Rs100, and if the cash reserve ratio is 6%, the banks will have to hold additional Rs 6 with RBI and Bank will be able to use only Rs 94 for investments and lending / credit purpose. Therefore, higher the ratio (i.e. CRR), the lower is the amount that banks will be able to use for lending and investment. This power of RBI to reduce the lendable amount by increasing the CRR makes it an instrument in the hands of a central bank through which it can control the amount that banks lend. Thus, it is a tool used by RBI to control liquidity in the banking system.

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Statutory Liquidity Ratio SLR (Current Rate: 24%)

SLR stands for Statutory Liquidity Ratio. This term is used by bankers and indicates the minimum percentage of deposits that the bank has to maintain in form of gold, cash or other approved securities. Thus, we can say that it is ratio of cash and some other approved securities to liabilities (deposits) it regulates the credit growth in India.

Repo Rate (Current Rate: 8.25%)

Repo (Repurchase) rate is the rate at which the RBI lends shot-term money to the banks against securities. When the repo rate increases borrowing from RBI becomes more expensive. Therefore, we can say that in case, RBI wants to make it more expensive for the banks to borrow money, it increases the repo rate; similarly, if it wants to make it cheaper for banks to borrow money, it reduces the repo rate

Reverse Repo Rate (Current Rate: 7.25%)

Reverse Repo rate is the rate at which banks park their short-term excess liquidity with the RBI. The banks use this tool when they feel that they are stuck with excess funds and are not able to invest anywhere for reasonable returns. An increase in the reverse repo rate means that

the RBI is ready to borrow money from the banks at a higher rate of interest. As a result, banks would prefer to keep more and more surplus funds with RBI.

Prime Rate or Prime Lending Rates (PLR)

Prime rate or Prime lending rates (PLR) refer to interest rates charged by commercial banks for their most credit-worthy customers. Generally credit-worthy customers consist of large corporations.

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Research Methodology

Deposit Rates
Interest rate paid by a depository institution on the cash on deposit.

State Bank of India: Interest Rates on 1st April, 2011

Interest rates as on 1st April, 2011 on various loans in Personal Segment advances are as under

1. Home Loans Loan amount Up to Rs.30 lacs Interest rate during 1styear Interest rate during 2nd & 3 rd year Interest rate from 4th year onwards 2. Car Loans Loan amount Interest rate during 1styear Interest rate during 2nd & 3 rd year Interest rate for 4th & 5th year Interest rate for 6th & 7th year Used Cars Up to 3 years Above 3 years and up to 7 years 3. Two wheeler Up to 3 years 16.50% Page 3 15.50 % 15.75 % 11.25% 11.25% 11.00% 11.00% Below Rs.5 lacs 9.25% p.a. 10.25% p.a. Rs.5 lacs and above 9.25% p.a. 10.25% p.a. 9.75% 10.00% 10% 10.25% Above Rs. 30 lacs to Rs. 75 lac 8.75%. 9.50%. 8.75%. 9.50% 10% 10% 10.25% 10.25% Above Rs.75 lac to Rs.5 Cr. Above 5 cr.

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Research Methodology 4. Education loans SBI Student Loans* up to Rs.4 Lac 12.00% Loans above Rs.4 Lac and up to 7.50 lacs 13.50% Loans above Rs.7.5. Lac- 12.5% 5. Personal loans Xpress credit (Demand Loan) Xpress credit (Overdraft) SBI Saral No Overdraft 16.75% 13.25% TO 15.25%

6. Loans against NSCs/KVPs/RBI Relief Bonds/Surrender value of SBI Life/LIC/SBI Magnums etc. Up to 3 years More than 3 years and up to 6 years 7. Loans against Gold Ornaments Up to Rs.1 lac:12.50% Above Rs.1 lac:13% 12.75% 12.75%

* 0.50% additional concession for girl students w.e.f.02.03.2009

Rates of AXIS BANK

Saving Account Deposit Interest Rate - 4% Rates Effective from: Friday, April 29, 2011

PERIOD DEPOSITS

INTEREST RATES ON DOMESTIC DEPOSITS (%) (p.a.) Interest Rate Interest Rates for Senior citizen on Deposits Below Rs 15 lakhs on Deposits of Rs 15 lakhs < Rs 50 Lakhs on Deposits of Rs 50 lakhs < Rs 1 Crore on Deposits below Rs. 50 lakhs on Deposits of Rs 50 lakhs < Rs 5 Crore Page 4

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Research Methodology 7 days to 14 days 15 Days to 29 Days 30 days to 45 days 46 days to 60 days 61 days to less than 3 months 3 months to less than 4 months 4 months to less than 6 months 6 months to less than 9 months 9 months to less than 1 year 1 year to less than 14 months 14 months to less than 15 months 15 months to less than 18 9.00 9.00 9.00 10.00 10.00 9.00 9.00 9.00 10.00 10.00 9.25 9.25 9.25 10.25 10.25 8.50 8.50 8.50 9.50 9.50 7.75 7.75 7.75 8.75 8.75 6.75 6.75 6.75 6.75 6.75 6.25 6.25 6.25 6.25 6.25 4.00 4.00 4.00 4.00 4.00 3.50 3.50 3.50 3.50 3.50 3.00 3.00 3.00 3.00 3.00 2.50 2.50 2.50 2.50 2.50 2.00 2.00 -

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Research Methodology 18 months to less than 2 years 2 years to less than 30 months 30 months to less than 3 years 3 years to less than 5 years 5 years up to 10 years 8.50 8.50 8.50 9.50 9.50 8.50 8.50 8.50 9.50 9.50 8.50 8.50 8.50 9.50 9.50 8.50 8.50 8.50 9.50 9.50 9.00 9.00 9.00 10.00 10.00

Rates Effective from: Saturday, January 22, 2011 INTEREST RATES ON TAX SAVER DEPOSITS 5 years only (Amount Capped at Rs. 1 lac per customer per Financial INTEREST Year) Regular Depositor (Individual & HUF) Senior Citizen (Individual) (p.a.) 8.25 9.25 RATES (%)

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